Question
ECA 1: Strategic Analysis
ECA1 (70%) – 5,000 word organisational strategic analysis using the appropriate
tools and data sources. This will assess learning outcomes 1, 2, 4, 5, 6 and 8
First, decide on what you are going to focus your strategic analysis on. The entire
organisation, or a particular strategic business unit?
Start with a simple question for this part of the assessment: where are we now?
Approach this from an internal and external perspective:
Solution
CONTENTS
3.5. Current Growth Strategies. 13
3.7. Internal Structures and Organizational Culture. 16
3.7.2. Organizational Culture. 16
3.9. Leadership and attendant challenges. 19
4.3 Strategic Business Initiatives. 24
4.6. Implications towards the business 27
4.6.1. Industry Life Cycle analysis. 28
2.0 Opportunity Identification. 32
2.2 Improving Health Conciousness. 33
2.3 Digital Marketing Tendency. 33
2.4 Tendency towards sustainability initiatives. 33
2.5 Availability of untapped market. 34
3.0 Strategic Requirements. 34
4.0 Business Growth Strategies in Next Five Years. 34
6.0 Achievement Of Business Growth. 37
Appendix 01 – SWOT Analysis (Detailed) 45
LIST OF FIGURES
Figure 1-Supply Chain – Retail 10
Figure 2-Market Share Analysis. 10
Figure 3-Mendalow’s Matrix. 22
Figure 5-Cargills Go Green Bag. 27
Figure 8-Softlogic Glomark. 29
Figure 9-Industry Life Cycle. 32
Figure 10-Triple Bottom Line. 33
LIST OF TABLES
Table 9-Stakeholder Analysis. 19
LIST OF ABBREVIATIONS
| # | Abbreviations | Description |
| 1 | GDP | Gross Domestic Production |
| 2 | FMCG | Fast Moving Consumer Goods |
| 3 | PLC | Public Limited Company |
| 4 | LKR | Sri Lankan Rupees |
| 5 | SWOT | Strengths, Weaknesses, Opportunities and Threats |
| 6 | PESTEL | Political, Economic, Social, Technological, Ecological and legal factors |
| 7 | OP | Operating Profit |
| 8 | NP | Net Profit |
| 9 | PBT | Profit Before Tax |
| 10 | PAT | Profit After Tax |
| 11 | CAPEX | Capital Expenditure |
1.0 Introduction
In the modern business environment characterised by immense challenges and options for an organisation to select from, strategic analysis is essential. Adopting Raikov (2019) definition, a strategic analysis identifies a process of researching an organisation and its operating environment for formulating a strategy. Ghicajanu (2019) supports this by identifying the strategic analysis as guiding definition of both internal and external environments in which a business operates. From the outcomes of the analysis, it is possible to make appropriate strategic solutions for a business. Based on this background information, this report exploits different tools and data sources for carrying out a strategic organisational analysis. From the analysis, appropriate areas of improvement are provided. The strategic business unit chosen for the above definition is Cargills food city, a Cargills Ceylon PLC supermarket chain.
1.1 Company Profile
Cargills (Ceylon) PLC can be identified as one of the most renowned and leading conglomerates in Sri Lanka. Sice1844 commenced its business operations with the retail industry and has diversified its business initiatives towards other business segments.
The company holds major brands such as Cargills Food city, Cargills Magic ice cream, Kotmale, Goldi and Sams Sausages, Miller’s distributors, KFC, TGI Fridays fast food restaurant chains, KIST and KIST Biscuits, which have accumulated a significant portion of target market around the country covering many consumers related segments.
The vision of the company is to be the global corporate role model in community-friendly national development. Its mission is to serve all stakeholders, from the public to the customers, by providing satisfactory service while ensuing reduced cost of living, developing youth skills, and eliminating regional disparity.
The company has achieved a sales revenue of over LKR 107 billion for the year ended 31st March 2020 while retaining a total profit of LKR 2.7 billion, reaching towards the top 20 companies in Sri Lanka (Cargills (Ceylon) PLC, 2020).
1.2 Cargills Supermarkets
Cargills Food City is regarded as the largest supermarket chain prevailing in the country. Cargills only focused on the high-end customer groups with the foreign orientation, which was available for the companies. With the management change of the business, the imported-oriented business platform has transformed into a local-oriented business model through the adoption of the local supply chain.
The supermarket segment of the Cargills is regarded as the first pillar of the business where it initiated its business operations in 1985 with one supermarket in Colombo. Through the numerous strategic initiatives, it has been able to extend its business operations around the country by creating a representation of the outlets in every district.
Figure 1-Supply Chain – Retail
Source: (Cargills (Ceylon) PLC, 2020), Page 15
An integrated supply chain covering suppliers, the company, and the customers would greatly enhance overall business effectiveness. Products sourced from suppliers to the warehouses and all perishables such as vegetables, fruits, and fish are collected through the collection centres established around the country. Therefore, all products are made available for customers around the country in line with their purchasing patterns.
The company’s retail division has attained a total revenue of LKR 83 billion for the financial year 2020, witnessing a 13% while retaining a total profit of LKR 846 million having a growth of 36% compared with last year.
2.0 Strategic Analysis
Strategic analysis is identified as carrying out in-depth research on an organisation and its operating environment for strategy formulation. This is evidenced in Papulova and Gazova’s (2016) study that focused on evaluating the role of strategic analysis in strategic decision-making. The study found out that strategic analysis assists in assessing and developing an environment inside and outside an organisation and revealing the possibility of opportunities and threats considered in strategic decision-making. This is since Rudnicki and Vagner (2014) note that strategic analysis is used to identify prevalent business environment opportunities while noting the business threats in the business environment. As evidenced in Santos and Fukushima (2017), the potential tools that can be used include SWOT, PESTEL, Porter’s 5 Forces analysis, and VRIO resource analysis, among others used to assess the internal and external business consequences.
Moreover, perspectives such as product situation, competitive situation, distribution situation, environment analysis, and the identification of issues and opportunities analysis are reflected. Therefore, as far as Cargills supermarket SBU is concerned, there are an enormous amount of future endeavors to be accomplished, which needs to be a critical evaluation of the current situation of the business is vital (LAKE, 2020).
Thus, internal and external business evaluation is undertaken as follows.
3.0 Internal Analysis
3.1. Introduction
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